Why New Gold Inc. (NGD) Is One of the Best Gold Royalty and Small-Cap Gold Stocks to Buy?

In the dynamic world of gold mining, New Gold Inc. (NGD) stands out as a compelling investment opportunity. With a strong balance sheet, impressive financial performance, and a diversified portfolio of mineral properties, NGD offers investors a unique blend of stability, growth, and dividend potential. Let's delve into the reasons why NGD is one of the best gold royalty and small-cap gold stocks to buy.



Firstly, NGD's diversified portfolio of mineral properties contributes to its resilience and growth potential. With principal operating properties like the Rainy River mine in Northwestern Ontario and the New Afton project in South-Central British Columbia, NGD's geographical diversification reduces risk and enhances growth prospects. The company's exploration efforts to expand mineral resources further position NGD as a resilient and promising investment in the gold sector.



Secondly, NGD's management team and board of directors play a pivotal role in the company's success and future prospects. The company has appointed seasoned professionals like Sophie Bergeron and Ross Bhappu to its board, strengthening its governance. Richard O'Brien's appointment as Chair of the Board further bolsters the company's leadership. The management team, led by President and CEO Patrick Godin, has demonstrated a commitment to growth and margin expansion, as seen in New Gold's Q2 2024 results. Their strategic focus on exploration and expansion, such as the Rainy River project, supports the company's long-term growth prospects.



Thirdly, NGD's balance sheet and financial performance compare favorably to its peers in the gold royalty and small-cap gold stock sector. With a market cap of $1.99 billion, NGD boasts a strong cash position of $140.5 million and free cash flow of $103.1 million in 2023. Its operating cash flow reached $353.8 million, and EBITDA was $354.9 million, indicating solid operational efficiency. NGD's P/E ratio of 126.0 and forward P/E of 6.59 reflect its growth potential and undervaluation compared to peers. Its 52-week low of $1.09 and high of $3.25 demonstrate resilience amidst market volatility. NGD's analysts' consensus rating of 'buy' and price target of $3.04 (20.64% upside) further support its investment potential.



Lastly, NGD's dividend policy and payout ratio are particularly attractive, with a current yield of 2.52% and a payout ratio of 30%. This compares favorably to peers such as Franco-Nevada (FNV) with a yield of 1.5% and a payout ratio of 25%, and Wheaton Precious Metals (WPM) with a yield of 1.2% and a payout ratio of 20%. NGD's dividend policy, combined with its strong operational performance and growth prospects, makes it an appealing choice for investors seeking a stable, lucrative gold investment.

In conclusion, New Gold Inc. (NGD) is one of the best gold royalty and small-cap gold stocks to buy due to its diversified portfolio, strong management team, impressive financial performance, and attractive dividend policy. NGD's commitment to growth, exploration, and margin expansion positions it as a resilient and promising investment in the gold sector. As an investor, NGD offers a unique blend of stability, growth, and dividend potential, making it an ideal choice for those seeking a "boring but lucrative" stock.